hide yo kids, hide yo wife!
Posted by howard in nyc in bad economy, bad karma, bad politicians
I have not ranted and spewed venom, errr, I mean I have not crafted a thoughtful and restrained essay on economic and financial collapse in a few weeks now. I have not been moved to words by any recent non-events. All due respect to Casey Anthony and the federal budget farce coupled to the juvenile lie of 'pending default', the two leading non-events being tracked faithfully by the joke of our news media and the sugar high distraction of the cultural consciousness. I don't know which is more surprising: the number of friends and acquaintances who were outraged over some white lady's acquittal, which i would've expected them to be unaware of, much less so strongly opined about; or how many of the same folks believe that TBTB are in any danger of failing to make a $30 billion monthly interest payment, out of $300 billion monthly expenses, when monthly income is ~$175 billion.
The interest on the national debt will be paid before salaries of all those government employees who do not carry weapons, or the social security/medicare/food stamps payments to the hoi polloi (yes, that includes doctors, or 'health care providers', which I am told is the preferred term.
Every fucking news report has the word 'default' in the lead. And it is a big fat hanging lie.See? I have nothing much new on my mind about real events in the world. Wars, rumours of war, unemployment, bank fraud, sovereign debt crises (at least that is heating up--finally). Just waiting for another big shoe to drop, in Damascus, Tripoli, Brussels or Wall Street.
In the meantime, two things I read that I really liked, and wanted to share.
First, from Jesse's Café Américain, one of my daily reads. A wonderful descriptive analysis (or maybe analytic description) of our horrible, hated president:
A bright fellow no doubt, but unseasoned by things like family, tradition, and the personal experience of hardship: a great story teller, a rationalizer, a perpetual outsider, and a thoroughly modern relativist. You have to keep your eye on what he does, rather than what he says. But that is a given with all modern managers.
The other, from a source I do not regularly read, but via Yves at Naked Capitalism, her daily news and commentary links are a daily don't miss for me. A blog called Decline of the Empire, a clip from a post non-sarcastically (and non-ironically) called This Time Really Is Different:
I've got some news for people like John Mauldin, Barry Ritholtz, Carmen Reinhart and Ken Rogoff—this time is different, but not in the sense you intend. To understand what is happening in the United States, it is necessary to go far beyond an historical survey of financial crises. You must consider the specific historical circumstances that led to the current crisis. Such a review would include but not be limited to the following observations—
- The United States has been hemorrhaging manufacturing jobs for 30 years.
- Almost all of the income gains made during that time went to the top 10% of wage-earners, with most of them going to the top 1%. Wealth inequality grew accordingly.
- Health care costs have been soaring all that time.
- College tuition costs skyrocketed at a pace far beyond the rate of inflation.
- Households took on more and more debt to replace lost income.
- We had not one, but two, substantial economic bubbles during the last 15 years. Without those bubbles, how much would the U.S. economy have grown?
- The private debt to GDP ratio grew and grew, clearly indicating that more and more debt was required to add an additional point of GDP.
- The Federal Government more and more became the tool of monied special interests.
And so forth. When people endorse Reinhart and Rogoff, we are supposed to understand that the Tough Times we're experiencing now have a well-defined beginning—the financial crisis after the fall of Lehman—and will have a well-defined end—however many years it takes to work through the credit problems. This is utter nonsense. The "historical obversations" I listed above are in fact the root causes of our current predicament.
And in each case, the historical trend has not changed, or has gotten worse. Households now have only slightly less debt than they did before the crisis, but trillions of dollars of housing wealth has disappeared. Health care costs continue to soar, as do college tuitions. Income gains still go to the wealthiest Americans. In short, nothing has changed.
That leaves those who want to believe that All Will Be Well with the same unsolvable dilemma we started out with: how do you tell a credible story that everything will turn out OK? I'm sorry, but no amount of convenient, hopeful rationalization is going to change the American disaster while the roots of the crisis remain in place. The financial meltdown was the proximate, not the ultimate, cause of America's economic woes.
This time really is different.
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